The surcharges on the various high-speed trains really killed the cost-effectiveness of the Eurail pass.
edit: There's a good overview of why the Eurail pass if often a bad option at Seat61: http://seat61.com/Railpass-and-Eurail-pass-guide.htm#Should you buy a railpass or pay-as-you-go
Not true. You have to be a resident to use Interrail. So if you don't have a European passport, but live there, you can still use Interrail.
Note also, "European" here means a lot more countries than the EU. Other eligible countries of residence include: Albania, Andorra, Belarus, Bosnia-Herzegovina, FYR Macedonia, Gibraltar, Iceland, Kosovo, Liechtenstein, Moldova, Monaco, Montenegro, Norway, Russian Federation, San Marino, Serbia, Switzerland, Turkey, Ukraine and Vatican City.
Source: http://www.interrail.eu/help/ordering-pass/do-i-need-interra...
BUT, you can use it to get on any train in Europe even if only by confusing the local conductor with a complicated Eurail pass, even if it's fully reserved or not part of Eurail.
Worth it if you're under 26 though because it is much cheaper.